Facebook - Becoming a Public Company

In February of 2012, the worlds largest doer in social media, Facebook, obdurate to apply to become a humansly traded ships caller-out. Facebook had said that they were spirit to raise most $5 billion dollars in hopes to finance projects that would ultimately grow their company (Luckerson 1). With 845 million active users, elfin debt, and records of strong annual kale; Facebook was evaluated to trade at $38/sh ar, estimating the companys worth at approximately $104 billion dollars. (Luckerson 1) The initial offering scathe had been record setting for a newly public company. The IPO sparked a ton of engross with investors that saw the potential profit, and Facebook finish up raising $16 billion dollars in investments. Since hit the entrepot market on May 18, 2012, Facebook currently trades at $77.70 and is evaluated at almost twice their IPO. (Luckerson 1) Its safe to say that fitting public has worked out salutary for Facebook financially, but that isnt always the s ubject field for others. Why do companies catch to trade in public, while virtually remain to stay clandestine? How are IPOs evaluated?\n\nWhy Did it persist for Facebook?\nThere are many vantages to being a publically traded company. Shares of a public company are such(prenominal) to a greater extent liquid than that of a offstage company because of the descent exchange. (Block 475) The stock exchange makes buying and selling stock simple, and easy. This means the public companies can reach investors much easier, quicker, and often at higher(prenominal) stock prices. Another advantage is that companies can use stock as an incentive for employees. utilize stock incentive plans, publicly traded companies can attract and sustain exceptional employees. (Block 475) Although the advantages of becoming a public company are enticing, there are somewhat drawbacks. It might be in some companies best concern to remain private. One of the biggest disadvantages is the added worklo ad of being a publicly traded company. More specifically, senior circumspection will be re...